Rental Cash Flow

A rental that "pays for itself" on the listing sheet can quietly cost you $300 a month once vacancy, maintenance, and condo fees join the arithmetic. Cash flow is rent minus everything — mortgage payment, property tax, insurance, vacancy, and the furnace that dies in February. This calculator totals the everything and tells you, per month and per year, whether the property feeds you or eats.

What this calculator answers

It computes your rental's cash flow: monthly rental income minus every monthly carrying cost — mortgage payment, property tax, insurance, condo fees, maintenance reserve, vacancy allowance, and property management if applicable. Positive means the tenant pays you; negative means you pay for the privilege.

What it deliberately does not cover

Cash flow is not profit. It does not include income tax on rental income — the CRA taxes that separately. It does not count the principal portion of your mortgage payment as a return; for cash-flow purposes principal repayment is cash out the door, even though it builds equity. It does not model appreciation, capital gains tax, or CCA recapture at sale. Use it for the month-to-month truth, not the lifetime investment case.

Every input, explained

Monthly rent. Enter the market rent the unit will actually command — check comparable listings, not the number that makes the math work. The common error is aspirational rent; every $100 of fantasy rent is $1,200 a year of fantasy cash flow.

Mortgage payment (principal and interest). Enter your full monthly payment. The common errors: entering an interest-only figure, and forgetting that an insurance premium was added to the principal — you pay interest on a larger loan than price-minus-down-payment suggests.

Property tax (monthly). Enter one-twelfth of the annual bill. The common error is the seller's two-year-old figure; assessments move, and the listing number is marketing.

Insurance (monthly). Enter the cost of a landlord policy — a different product at a different price than a homeowner's policy. The common error is carrying over the insurance number from your own home.

Condo fees. Enter the full monthly fee. The common error, borrowed from mortgage-qualification math, is entering half — lenders use half for debt ratios, but the condo corporation cashes the whole cheque.

Maintenance reserve. Enter a monthly allowance, often a percentage of rent. The common error is zero because the building is new — new buildings get special assessments too.

Vacancy allowance. Enter expected empty months as a percentage of rent — 4% is roughly two weeks a year. The common error is zero: even in a hot market, tenants leave, and turnover months are rarely fully collected.

Property management. If you use a manager, enter the percentage of rent. Self-managers entering zero should remember the monthly hours the unit consumes — your time is not free, even if the calculator cannot price it.

How the math works

Add up every monthly cost and subtract from the monthly rent — that is your monthly cash flow; multiply by 12 for the annual figure. The calculator's value is forcing every cost onto the same page, including the ones listings forget.

Worked example: Calgary condo renting at $2,200 a month

An investor owns a Calgary condo rented at $2,200 per month. The monthly costs, entered as example inputs:

1. Mortgage payment (principal and interest): $1,650.
2. Property tax: $2,400 per year ÷ 12 = $200 per month.
3. Landlord insurance: $600 per year ÷ 12 = $50 per month.
4. Condo fees (full amount): $420 per month.
5. Maintenance reserve at 5% of rent: $2,200 × 5% = $110 per month.
6. Vacancy allowance at 4% of rent: $2,200 × 4% = $88 per month.
7. Total monthly costs: $1,650 + $200 + $50 + $420 + $110 + $88 = $2,518.
8. Monthly cash flow: $2,200 − $2,518 = −$318.
9. Annual cash flow: −$318 × 12 = −$3,816.

The rent covers the mortgage with $550 to spare — yet the property loses $318 a month. The mortgage is usually only two-thirds of the story. This investor needs higher rent, a bigger down payment, a cheaper property, or an acceptance that they are banking on appreciation, not income.

Provincial quirks and edge cases

Two federal rules reshape rental cash flow everywhere in Canada. First, a non-owner-occupied rental requires 20% down regardless of price — so your mortgage payment reflects far less leverage than an owner-occupied purchase at 5% down. Second, mortgage default insurance is not available on rentals at all. On the tax side, net rental income is taxable, and claiming capital cost allowance creates a recapture bill at sale — both outside this calculator but central to whether negative cash flow is tolerable. Watch vacancy-related taxes: Toronto levies a 3% vacant home tax on assessed value (owners must declare occupancy every year), which can turn an empty-between-tenants unit into a tax event. And rent increase rules differ by province — never assume you can raise rents to fix negative cash flow; check your province's tenancy rules first [VERIFY].

Questions to ask a professional

1. Mortgage broker: With 20% down required and no insurance option, what is my actual monthly payment at current rates?
2. Insurance broker: What does a landlord policy cost for this property type, and what does it exclude?
3. Property manager: For this building and neighbourhood, what vacancy rate and maintenance budget are realistic — not optimistic?
4. Tax professional: How is the rental income taxed in my situation, and should I claim CCA given the recapture at sale?